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There are different ways in how two income statements are prepared. For example: the income statement (also known as P&L) of a merchandising company consists of Revenue, Expenses (related to the sales volume through the Cost of Goods Sold (COGS) and General & Administrative Expense (G&SA), which all result in Net Income. The income statement of a Service company consists of Service Revenue minus any Expenses related to that service, which results in Net Income.
Another way to look at it is that inventory never leaves the balance sheet until it is physically sold to a customer, which transfers it to Cost of Goods Sold.
What else can I help you with?
How do components of revenue and expenses differ between a merchandising company and a service enterprise?
Merchandising Companies purchase and sell directly and is ordinarily longer than a service company because of the inventory and its eventual sale lengthen the cycle, which differ merchandising and service companies.
Why is the normal operating cycle for a merchandising company likely to be longer than for a service company?
Why is the normal operating cycle for a merchandising company likely to be longer than for a service company?
Merchandising and service company have gross profit?
do some research
Is Publix supermarkets a merchandising company service company or manufacturing company?
Publix is a retail merchandiser.
What are the 3 types of services?
list & describe the 3 form of business? describe each of the 3 types (service, merchandising & manufacturing) of business operation? Explain the difference between manufacturing & merchandising?
What is the difference between services and merchandising?
Merchandisers sell goods produced by manufacturers while service companies do not make or sell goods.
What are the 3 types of room service?
list & describe the 3 form of business? describe each of the 3 types (service, merchandising & manufacturing) of business operation? Explain the difference between manufacturing & merchandising?
What is the difference between a service organization and a merchandising organization?
A service organization provides intangible services, such as consulting or legal advice, while a merchandising organization sells tangible goods, like clothing or electronics. Service organizations focus on expertise and customer experience, while merchandising organizations focus on product selection and sales volume.
1 In comparing the accounts of a merchandising company with those of a service company what additional accounts would the merchandising company likely use assuming it employs a perpetual inventory?
Cost of goods sold and Gross profit
What is the difference between a service company and a retail company?
Retail company provides goods for you to buy... for example, clothing stores. Service company provides you a service... for example, a cable television provider.
How does income measurement differ between a merchandising company?
As you can see, in merchandising companies we have more special components of revenues and expenses than service companies. Besides, merchandising have two different systems periodic inventory system and perpetual inventory system. Each system has own way to count goods.
Is the measurement of net income for a merchandising company conceptually the same as for a service company?
Well if you look at it by the basics you will see both use the same Net income = revenue - expenses. However the income statement for the service company subtracts the operating expenses from the revenues to arrive at net income. The merchandising company subtracts the cost of merchandising from the revenue to arrive at gross profit. It then subtracts all other operating expenses to arrive at net income.
